Europeans buy more than $100 billion worth of medical devices a year, making the continent the second-most lucrative market on the planet for med-tech.
But selling devices there is about to get a lot more complicated — so complex that some med-tech companies in Minnesota plan to pull products off the European market, while some newer companies may opt not to compete there at all, because of the increased cost and uncertainty involved.
With a critical deadline looming next year, all 500,000 medical devices currently sold in Europe must be recertified for sale under a stricter new law known as the Medical Device Regulation. Under the MDR, there’s no “grandfathering” process in which devices already on the market are deemed safe by default, as happened in the United States in 1976 when Congress overhauled the system.
By design, recertification in Europe will require stronger clinical evidence than before to prove that a device meets standards for safety and performance, especially with higher-risk products.
People who have studied the MDR closely hedge when asked whether the new requirements will make patients safer. But they are unanimous in saying the new requirements are costly.
“It’s a multibillion-dollar change in our industry,” said Tracy Eberly, owner of Minneapolis’ Fang Consulting, estimating that MDR compliance will consume roughly 8 percent of an average device’s total European sales.
Even companies doing extraordinary amounts of work to comply with the MDR are becoming increasingly concerned that it may not be possible to get all of their products recertified before the deadline in May 2020 because of an acute shortage of certified inspectors. So far, only one organization has been approved to certify compliance with the MDR.
Many companies are trying to buy more time by securing a last-minute renewal of certification under the old law, allowing them to operate under status quo until 2024 (though they are still subject to enhanced data-gathering requirements in the meantime).
But there’s no guarantee that strategy will work, given how busy the regulating groups are today, leaving some to wonder whether European lawmakers will extend the MDR deadline.
“We’ve been advising our members since before the regulation was even passed, in May 2017, to get prepared,” said Ralph Ives, executive vice president of global strategy and analysis with Washington-based trade group AdvaMed. “There has been no indication by the European Commission that there will be any extension.”
Other observers speculate that regulators may grant extensions for specific devices in situations where the deadline was missed because of the shortage of certified inspectors.
“If you have done everything you could to be prepared, and you could not get audited, then it is not really the fault of the company,” observed Lars Henrik Jensen, program director for MedTech Bridge, an international med-tech partnership between officials in Denmark and Minnesota.
The new law is designed to enhance the quality and consistency of clinical data that are required to market a product across Europe, and make it easier to track the performance of specific devices throughout their entire life cycle.
The move is likely to cause hundreds, and maybe thousands, of products to leave the European market. Jennifer Mischke, global vice president of consulting services for clinical research organization Namsa, said companies are more likely to drop older and lower-volume products, than newer ones.
In the long run, the MDR also may upend Europe’s traditional role as a place where new devices are first tested in large all-comer populations.
For example, popular catheter-delivered aortic heart valves were first introduced in Europe in 2007, and in the U.S. in 2011. As of 2012, Europe had five approved devices for a hypertension treatment called “renal denervation,” while U.S. authorities have never approved any such device. Both are higher-risk therapies, for which Europe’s standards are coming closer in line with the U.S.
But for lower-risk devices, which are the majority, it may be harder to get certification in Europe than to get clearance in the U.S. in some cases.
Longtime med-tech entrepreneur Dave Rosa, currently CEO of Minnetonka’s NeuroOne, said his company’s experimental new device to detect and potentially treat refractory epilepsy will be launched in the U.S. and Asia first. Given the startup’s limited resources, it makes more sense to get clearance under the FDA’s 510(k) system than to do a full-blown clinical trial to get sales certification in Europe first.
That’s a big change. In the past, Rosa said, “everyone ran to Europe first, and then you would make your way back to the U.S. … now, it’s almost like things have reversed.”
Med-tech companies with lots of different products — like ostomy and urology device maker Coloplast, which has U.S. headquarters in Minneapolis — will need to start gathering fresh clinical evidence to keep products on the market and change packaging to comply with the new rules.
“Ensuring compliance will entail increasing costs for Coloplast. The key cost drivers include increasing need for clinical evaluation, labeling, safety reporting, as well as increased fees,” Coloplast Chief Financial Officer Anders Lonning-Skovgaard said in an e-mail. “A limited number of products will be discontinued as the cost of modifying the packaging doesn’t correspond to the turnover” or revenue produced.
Carl Stamp, senior vice president for global marketing at Plymouth-based Smiths Medical, said the maker of infusion pumps and related supplies will be looking to see if the increasing costs under the MDR become the final and determining factor in deciding whether to pull some products from the European market. “We would have to look at some of those very old legacy products and say, does it really make great sense to take the time, effort and resources to ensure its compliance?” he said. “It becomes very much a business decision.”
Netherlands-based health care regulatory attorney Erik Vollebregt said some of the companies most affected by the law are smaller companies that won’t be able to meet the enhanced clinical-study requirements, particularly those whose products are having their risk categories “up-classified,” including aesthetic devices and digital health apps.
“Software medical devices will be subject to a new classification rule in the MDR,” Vollebregt said in an e-mail. “This covers a lot of software that has been down-regulated in the U.S. over the last years, such as health apps.”
The software in question would need to be assessed by a “notified body,” an independent organization that is officially certified by one of the E.U. nations to be able to do audits and certify compliance with the new regulations. These groups are central to implementing the new law, though they also played a role in encouraging the reforms.
The MDR was spurred on by recent med-tech scandals including the implants of tens of thousands of defective silicone breast implants made by the defunct French company Poly Implant Protheses. PIP founder Jean-Claude Mas was sentenced to four years in prison for fraud after authorities learned that his company had been filling its implants with cheap industrial-grade silicone, which contains more impurities than medical-grade silicone, leading to health problems for scores of women worldwide.
German notified body TUV Rheinland had issued a certificate of quality for PIP’s production. Although TUV Rheinland was initially hit with claims of negligence, the notified body fought back in court, arguing that it, too, was a victim of fraud by PIP, and that PIP’s use of industrial silicone was not detectable.
“Problems with diverging interpretation of the current Directives, as well as the incident concerning fraudulent production of the PIP silicone breast implants, highlighted weaknesses in the legal system in place at the time and damaged the confidence of patients, consumers and health care professionals in the safety of medical devices,” European Commission members wrote in a regulatory framework about the new MDR. “Such problems should not occur again.”
Having only one notified body approved to certify compliance with the new law has led to a serious regulatory bottleneck, especially since the workload already outstrips the notified body’s (NB) capacity. AdvaMed’s Ives said only 10 percent of the existing 58 NBs are expected to be officially designated by this May.
“This means an estimated 40-fold workload increase for this small handful of NBs,” Ives said. “The resulting, near-certain inability of the NBs to complete their work on time means that many med-tech manufacturers will not be able to ensure European hospitals, doctors and patients access to the full range of medical devices they depend on.”